XRP’s 44% rally brings leverage back, raising risk of sharper pullback
XRP has experienced a significant price rally, leading to a seven-month high in leverage ratios on major exchanges. Analysts warn that this high level of leveraged long positions increases the risk of a sharp market correction if prices drop.
Why it matters
High leverage in crypto markets often precedes volatile liquidations, which can destabilize asset prices and impact retail investors.
Data from onchain analysis firm CryptoQuant's estimated leverage ratio for XRP on Binance has climbed to about 0.21, its highest since January. The measure compares derivatives open interest with exchange reserves, with higher readings showing more leveraged exposure building relative to the amount of XRP sitting on the venue.
On Binance, about two accounts were betting long on XRP for every one betting short on Wednesday, CoinGlass data shows . Among top traders, the ratio was closer to three-to-one, while OKX accounts were running roughly two longs for every short.
XRP futures generated about $6.4 billion of volume over the previous 24 hours, more than five times the roughly $1.2 billion traded on spot markets. Futures open interest stood at about $3.45 billion.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in